Mohamed A. El-Erian, Chief Economic Adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-Chief Investment Officer, was Chairman of US President Barack Obama’s Global Development Council. He previously served as CEO of the Harvard Management Company and Deputy Director at the International Monetary Fund. He was named one of Foreign Policy’s Top 100 Global Thinkers in 2009, 2010, 2011, and 2012. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

I think Mohamed is right in the point that Central Banks can not be left alone on this task; he is right also by pointing to the lack of sense of Estate and responsibility of many policians & legislatures across the world. However, it touches very briefly in the role of the markets, particularly institutional investors (like PIMCO). These institutions could do way much more that are doing: 1) as he pointed, changing from short term oriented investment for the quarterly gain, to a proprer LT horizon; 2) reducing allocation to speculative investment (ie Hedge Funds), and so take proper responsibility of your own investment instead to delegate it to others; 3) embrazing the non-liquid part of the market (SMEs & MidCorps) that are the engines of job creation; 4) taking a properly activist and LT oriented presence in the boards of public companies to change CEO hubris & behaviours; 5) changing their own business models to develop origination capability with geographical capilarity (to reach those SMEs), and so assume direct financing vs the stretched banks.... But of course, these changes, beyond a great courage, also require to diminish quite considerably the internal pay & bonuses if you want to keep running an Asset Mgmt. business at decent Cost-to-Income ratio... as usual, what damages your pocket does not call for action! Thus, it is time for the Institutional Investors worldwide, ultimately owing their mandate to the countries population (via pension, insurance policies and the like) to step up and do their bit (and for politicians & regulators to start changing the rules of the game of the investment process from The Inception, the trustees & the insurance cies.... so that all the chain behind them of Asset Managers and ultimately Investment Bankers change their behaviour consequently... which will undoubtedly and reluctantly have to do because they are agents paid by the former... let's recall, the human beings owners of the pension plan & the insurance policy).

I recall that Fed leaders have repeatedly stated that their policies and actions cannot be fully effective, nor would they have been as extended as has been the case, if Fiscal policy and action by the US Congress had been taken up in a reasonably responsible manner, rather than how it has been over the last several years. It seems that the Central Bank does what it does in large part because it's the only oar working in the boat - of course that means we may well just be going in a large circle, in terms of real economic effect.

Central banking is neither democratic nor capitalistic. It is first and foremost a pragmatic response to an inherent characteristic of our desire for stable and sustainable credit markets. Credit provision and use follows a cycle, we use central banks to extend that cycle. Our mistake has been thinking we can eliminate the cycle. Central to the success of extending the cycle is the maintenance of a fiat money system, where by money can be created with the stroke of a pen, as opposed to working to dig it up.

This is good news, because if we are ever going to evolve as a species, we need to transcend debt based money. In a debt based monetary system, the other policy makers you refer to have not much choice. The sad thing is, the current system of debt based money is founded, or at least it is kept alive, by the unwarranted principle of scarcity in economics... in an abundant and miraculous cosmos! This uncertainty should give birth to innovation so that this species and this planet can address and embark on the evolutionary path it wants to pursue. http://www.icarusinterstellar.org/dr-armen-papazian-wins-the-first-alpha-centauri-prize/

If no one else is listening to, let say FED's warnings, then why FED as an "independent" institution doesn't stop doing this madness of QE? It doesn't stop, because it is so good for the whole financial sector, regardless of inefficiency for the rest of the economy. There is no doubt who the FED works for. The same is with any central bank in the world. And it is ridiculous to even suggest that there is no other ways for solving the crisis.

From the list of Fed’s dappled accomplishments, the one that would stand out is the continuity of ultra-looseness that allows printing to be done at such perfecting speed that any thought of a change in the drip feed rate of $85 Billion a month makes a storm look pale in the financial markets, while a $Trillion is sitting on the liability side of its balance sheet stemming from excess bank reserves of commercial banks. There is no other action in sight while the government is left to the fence-sitting role it had assumed blissfully, as passing budgets and raising debt ceiling are left to abstractions of occasional nature.

The predictability of Fed, if it changed a wee bit, could have done better in these uncertain times.

As the creature of both the U.S. Congress and private banking interests, the Fed is the hybrid spawn of democracy and capitalism (such as they are). Designed primarily to avert and mitigate financial panics through regulation, the Fed's use of tactics such as financial repression and asset inflation through the medium of financial markets reinforces the American ideology of self-interest and limitless consumption in pursuit of the nominal growth that hides costs in balance sheets, deficits and promised but undeliverable essential future benefits. A classic con job, in whose interest?

Actually, to reduce central banks to impotence beyond liquidating insolvent institutions, would be excellent, particularly is NO other human institution capable of fiddling with currency value, interest rates, or the general level of economic activity were allowed to exist.

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